Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Eleonora Rosati, Annsley Merelle Ward, Neil J. Wilkof, and Merpel. Nicola Searle is currently on sabbatical. Read, post comments and participate! E-mail the Kats here

The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy

Friday, 30 January 2015

The principle of exhaustion (also referred to as the ‘first sale’
doctrine) is a hot topic in copyright with important commercial ramifications, particularly in relation to 'online exhaustion' and the viability of a second-hand market in digital content. In this post, we will look at the broader implications of the recent CJEU ruling in Case C-419/13Art & Allposters and assess what additional insight it can give us into the thorny topic of exhaustion.

Before delving into the detail, a brief recap to provide some context:

Exhaustion: what is it again? Under copyright, the exhaustion principle limits the rights-holder’s exclusive
right to distribute a protected work, where the distribution right is ‘exhausted’
following the first (authorised) sale of the work, i.e. the rights-holder can
no longer prevent further distribution of that work. The underlying rationale
is to strike an appropriate balance between the rights-holder’s interests and the
free circulation of goods.

Why is exhaustion such a hot topic? In the EU, the CJEU's controversial ruling in Case C-128/11 UsedSoft gave rise to limited circumstances where downloaded computer software could be lawfully re-sold on the basis that the distribution right under the Software Directive had been exhausted. There is legal uncertainty on how the UsedSoft ruling applies to other types of digital content, in particular, e-books and videogames, parts of which may fall to be protected under both the Software Directive and the InfoSoc Directive. In contrast, the current position under US law following Capital Records v Redigi Inc 934 F.Supp.2d 640 is that there is no first sale defence (i.e. exhaustion) for digital files.

What was Art & Allposters about? The case concerns the scope of the exhaustion
principle under the Information Society Directive in circumstances where a company uses a chemical process to transfer the
ink from a paper poster (of a famous art work) onto canvas. The issue was whether the rights-holder’s
consent was required to distribute the resulting canvas-based work created from the poster version via the ink transfer process. It is important to note that this case concerns exhaustion under the InfoSoc Directive, and not the Software Directive (which was the subject of the UsedSoft decision).

What did the CJEU rule in Art & Allposters?

A key aspect of the
CJEU’s ruling is its view that the exhaustion of the distribution right under the InfoSoc Directive covers
the tangible object into which a work (or a copy of it) is
incorporated. In other words, it is inherently tied to the physical medium (e.g.
paper, canvas) on which the work is expressed. On this basis, the CJEU ruled that:

where there is a "change" to the physical medium on which the work is incorporated (e.g. from paper to
canvas), the distribution right is not exhausted in respect of that second
work because it is now incorporated on a different physical medium.

such a "change" to the physical medium may result in a new reproduction of the work which potentially infringes the author’s reproduction right, and thus requires a separate authorisation.

In justifying its approach, the CJEU asserted that its reasoning is consistent with the principal objective of the Information Society Directive to provide an adequate level of protection for copyright works and to appropriately reward authors for use of their works. Here, the economic value of the canvas-based works was significantly higher than the poster works. Thus, if the CJEU had held that consent was not required for the exploitation of the canvas-based works, this would otherwise have deprived the rights-holders from obtaining an adequate reward for the commercial exploitation of their works.

What does a 'change' to the physical medium look like?

One question that leaps out from the ruling is what constitutes a sufficient ‘change’ to the physical medium into which a work is incorporated, such that it results in a new reproduction of the work for which the distribution right is not exhausted (and for which potential liability under the reproduction right may arise).

A key aspect in this regard is the CJEU’s observation (at [45]) that, “What is important is whether the altered object itself, taken as a whole, is, physically, the object that was placed onto the market with the consent of the rightholder.”

On the facts, the CJEU considered it irrelevant that the actual ink on the poster was transferred onto the canvas (as argued by the defendant): this did not affect the outcome that the canvas-based work, taken as a whole, was physically different to the poster work which the rights-holder had authorised to be put onto the market (and consequently, the distribution right in the canvas-based work was not exhausted by the first authorised sale of the poster-work).

On the basis of this limited guidance, we are therefore left to interpret what the CJEU meant by “taken as a whole”, and national courts will need to draw their own conclusions as to when a new reproduction occurs on the facts of each case.

I'm exhausted.

This may prove to be a perplexing exercise where the work's physical medium is maintained and combined with another, for instance, gluing a poster to a timber backing or sealing it within a block of glass. Taken as a whole, is that altered object the same object as the paper one originally placed on the market with the rights-holder’s consent? In analysing the position, does it matter if the change is permanent or temporary?
What are the broader implications of the Art & Allposters ruling?

The CJEU's ruling will be directly relevant to stakeholders involved in the exploitation of copyright works (in particular, artistic and literary works) produced on physical, tangible objects. This could affect manufacturers, distributors and retailers of a wide range of goods sold in gift shops, galleries, home furnishing outlets etc. which incorporate copyright works.

It is reasonably clear that for artistic and literary works (protected under the Information Society Directive), the exhaustion principle is tied to the physical medium on which the work is expressed, whether that be paper, canvas, glass or a stone tablet. Licensees will need to ensure that their intended uses of the licensed copyright works on different physical media are adequately covered in the licence terms to mitigate the risk of future challenge by the licensor (and similar considerations apply in the relation to any assignment of rights).

It is also worth noting that the issues raised in Art & Allposters have been the subject of legal proceedings elsewhere: see for example the 2002 case before the Supreme Court of Canada of Théberge v Galerie d'Art du Petit Champlain Inc 2002 SCC 34(regarding an almost identical transfer process from a paper poster to canvas) and before the US District Court (N.D. Texas) in CM Paula Company v. Logan, 355 F. Supp. 189 (regarding the transfer of copyright designs from greeting cards and note pads onto ceramic plaques).

Does Art & Allposters affect 'online exhaustion' following UsedSoft?

In Case C-128/11 UsedSoft, the CJEU indicated (at [60]) that its interpretation of exhaustion under Art 4(2) of the InfoSoc Directive would not be capable of affecting the interpretation of exhaustion under Art 4(2) of the Software Directive. It reasoned that a) the InfoSoc Directive leaves intact and does not affect the Software Directive which constitutes a 'lex specialis' and b) the Software Directive needs to be interpreted in light of the "different intention expressed by the European Union legislature in the specific context of that directive".

Leaving aside this Kat's personal views on the highly questionable analysis that permeates the UsedSoft ruling, this would seem to suggest that the CJEU's approach to exhaustion under the InfoSoc Directive in Art & Allposters has no direct relevance to the question of exhaustion under the Software Directive, following UsedSoft.

However, the Art & Allposters ruling does highlight the curious position in the EU, where the scope of the exhaustion principle differs depending upon whether the work falls to be protected by the Software Directive or the InfoSoc Directive:

For works protected under the InfoSoc Directive: the exhaustion principle is inherently tied to the physical medium on which the work is expressed. There is a strong inference that exhaustion was not intended to apply to works distributed via online, intangible means, such as by download;

For works protected under the Software Directive, the exhaustion principle can apply to computer software that is distributed via download (as well as distribution on a physical medium) provided that certain conditions are fulfilled (e.g. there is a 'sale' which is broadly interpreted to include the grant of a right to use the software for an unlimited period for a fee that corresponds to the economic value of the work; original acquirer must make his/her own copy unusable at the time of the resale)

This is an unsatisfactory position for many reasons, not least because certain types of complex works could potentially be protected by both the InfoSoc Directive and the Software Directive.

This is the result of a series of CJEU judgments (primarily: C-393/09 BSA[see here], C-406/10 SAS Institute[see here]and C-355/12 Nintendo[see here]) which cumulatively have desiccated the scope of protection under the Software Directive to the source code, object code, and any preparatory design material of a computer program. Other creative components expressed by a computer program such as the graphic user interface, sound elements, data file formats and programming languages fall to be protected under the InfoSoc Directive (provided that they constitute their author's intellectual creation).

The unsatisfactory lack of clarity can be highlighted by the example of an e-book with enhanced functionality such as embedded audio/visual media, animations, text highlighting, and other interactive elements. A lawful acquirer of the e-book then makes it available for download in a way that falls within the UsedSoft criteria.

The copyright work here is a complex, multi-layered work which is likely to fall within the protective realms of both the InfoSoc Directive (for instance, in relation to any images, text, music etc. shown on the e-reader device, tablet etc.) and the Software Directive (in relation to the underlying code that results in the end-user being able to enjoy the work via the graphic user interface on an appropriate device).

Thus far, there is limited guidance from national courts (and none from the CJEU) on the application of the exhaustion principle to these types of complex works. However, the German Regional Court of Bielefeld's view was that UsedSoft was not applicable to downloaded e-books and audio books [see the JIPLP blog here] and the Amsterdam Court of Appeal recent shut down the e-book platform, Tom Kabinet, although it sidestepped the question of the scope of the exhaustion principle to e-books [see hereand here]. It is likely that a further reference to the CJEU will need to be made in due course to clarify the position.

Is this how you feel right now?

For now, one thing is clear, which is that the application of the exhaustion or first sale principle to digital content will continue to be a contentious issue. The course taken by different jurisdictions is likely to be heavily policy-driven (as appears to be the case with UsedSoft). Competing interests will need to be balanced: allaying concerns about the creation of a second-hand market of perfect-quality digital copies at reduced costs to the detriment of the rights-holder whilst still facilitating the free circulation of goods.

Amazon Inc's US patent for a "secondary market for digital objects" including e-books: here

For those in warmer climes than London, how to spot heat stroke in exhausted cats: here

The making of unwarranted threats to sue someone else for patent infringement is actionable in the United Kingdom. The principle is plain -- but its execution in statutory terms and the subsequent case law has revealed convolutions and curlicues that can scarcely have been imagined back in the mid-1970s when the provision was drafted. Here's a note on the most recent case on the subject, concerning which the IPKat is delighted to have received the following guest post from our good friend and occasional contributor Paul England:

Flood’s summary threats action sinks

Patent actions are highly unusual territory in which to see successful summary judgment applications, and His Honour Judge Hacon continues that almost unbroken line in Global Flood Defence Systems & Another v Van den Noort Innovations BV & Others [2015] EWHC 153 (IPEC). However, this case was not concerned with the normal difficulty of trying to prove summarily that there had been infringement and/or invalidity. Instead, it is about the defence of justification in the context of making unwarranted threats to sue for patent infringement that were based only on a patent application.

At the heart of the dispute is a European patent application (No. 2315880) "Self closing flood barrier and method for protecting a hinterland using same", designating the UK, in the name of the first defendant. For a while the application was exclusively licensed to the first claimant, permitting it to sell a flood defence device called the ‘self closing flood barrier’ (SCFB). The agreement came to an end, at which point the first claimant began to sell a flood defence product called a ‘self activating flood barrier’ (SAFB). The defendants thought that the SAFB was not significantly different to the SCFB and that it fell within the claims of the patent.

The defendants objected to the sale of the SAFB and did the following:

• they placed three notices on the first defendant’s website, alleging infringement of their patents and

• they sent a letter by email to Sir Peter Luff MP, an organiser of a House of Commons reception called “Britain Prepared – A Flood Resilient Society”, complaining that the second claimant was infringing the patent.

Patent litigation: a worse threat than floods?

A few weeks after these actions, the claimants filed a claim alleging, among other matters, that the steps taken above amounted to groundless threats. However, the basis of the unjustified threats action – Section 70(1) of the Patents Act 1977 – refers only to threats of proceedings for infringement of a “patent”. Did this mean that the section applies to threats of proceedings on the basis of Section 69 Patents Act (the right to claim relief after grant for infringements committed prior to grant)? If so, is the defendant entitled to rely upon a defence of justification under Section 70(2A) Patents Act?

On the first point, the judge referred to the Court of Appeal in Patrick John Brain v Ingledew Brown Bennison & Grant [1996] FSR 341 as authority for the principle that the cause of action under Section 70(1) is available for such threats. As a matter of logic, the Court of Appeal held, it must follow that the defence of justification (then under Section 70(2)) should also be available. However, and as made explicit by Laddie J when later considering Brain in [1997] FSR 271, in order to rely on the defence of justification, the patent must be granted by the time of trial.

The parties agreed that the test to be applied to the defence under Section 70(2) was whether it lacked reality, and the claimants advanced three reasons why it fell short, beginning with the point in Brain:

1. There was no prospect that the patent would be granted by the time of trial;

2. The defendant’s threat to bring imminent proceedings for infringement of a granted patent could never be justified at trial and

3. The threats were made in respect of sale of SAFB products, which fell outside the claims of the application.

There was just sufficient evidence on the first point for Judge Hacon to conclude that it was plausible that the patent would be granted before trial, and the third point could not be accepted because no evidence had been admitted on the claims of the application.

As regards the second point, there was an issue of construction: were the website notices and the letter to Sir Peter Luff threats to bring imminent proceedings or were they contingent on the grant of the patent? The judge understood the claims to mean that proceedings had already been brought against the claimants, including claims for infringement of a granted patent, and that other infringers would be pursued, including purchasers of SAFBs. Finally, the claimants argued that the defendant’s threats to join in third party purchasers to imminent proceedings for infringement of a patent were unjustified because they could not be made good (ie it is not possible to bring proceedings against a patent that has not granted). Judge Hacon rejected this argument, agreeing with the defendant: the issue is not whether it is possible for the defendants to do what they have threatened, but whether there is a real prospect of establishing at trial that the sale of SAFBs between the date of the threats and the grant of the patent infringed its Section 69 rights.

In light of the above, the claimants’ summary judgment application was dismissed.

When this Kat needs to look up a word, he still reaches for his copy of the Concise Oxford Dictionary. The tagline on the book's jacket says it all: "The world's most trusted dictionaries." Trust in the brand and the contents of the dictionary are central to this Kat's reliance on this tome. The implication is clear-—trust and IP go hand-in-hand.

But what happens when trust can longer be taken for granted? A recent publication that appeared in connection with the launch of the 2015 Edelman Trust Barometer sends a clear warning.
The Edelman Trust Barometer is one of the most keenly-awaited reports in the area of public sentiment. For 15 years, it has tracked the degree of trust held by the public across 27 nations in various global institutions, particularly in government, business, NGOs (non-governmental organizations) and the media. Over this period, the Trust Barometer has shown several clear trends regarding the level of public trust-—NGOs on the rise, media down somewhat, government bouncing up and down and government cratering in the eyes of the global public. Until recently, there was a bit of a balancing act going on; much like a hedge fund, a decline in trust in one category of institution tended to be offset by a rise in trust in another. No longer is this case. As Philip Edelman has reported in his paper, Earning the Right to Innovate, "now we see an evaporation of trust across all institutions", as all institutions seem to be unable to offer solutions to the acute problems of our time.
Lest Kat readers conclude smugly that while this is interesting, it does not affect them, consider Edelman's further observation:

"There is a new factor depressing trust: the rapid implementation of new technologies that are changing everyday life, from food to fuel to finance institutions."

More particularly, the respondents across the board, by a two-to-one margin, are of the view that new developments are moving ahead too rapidly and that there is insufficient testing of new developments. More tellingly, more than half (54%) felt that the real "impetuses" for innovation are not to make the world a better place, but simply that innovation is good for business growth, or even worse, that it is simply a tool to satisfy the innovator's greed. In light of these findings, the claim made by Jeff Bezos in an interview with Foreign Affairs magazine, as reported by Edelman, that “[n]ew inventions and things that customers like are usually good for society”, seems scarily off the mark.
At a more granular level, Edelman's report showed that trust levels in genetically modified foods and hydraulic fracturing are at the bottom of the table (in the 30% and 40% range, respectively), with electronic payments and cloud computing (50%) and personal health trackers (69%) enjoying somewhat higher levels of trust. On the one hand, the public yearns for more governmental regulation, but paradoxically the public has little trust that government has the capacity to do so in an effective manner. The public's fear of the unknown has been joined by a growing concern that innovation, as carried out by business, is moving too quickly. No wonder the public's views seem so confusing.

Okay Kat, but what about IP? Yet another observation by Edelman paves the way:

"The Trust Barometer confirms a direct correlation between the trust level in a country and its willingness to accept these innovations. At the top of the list of trusters are the United Arab Emirates (UAE), China, India and Indonesia. At the bottom are several nations in Europe including Germany, France and Spain, plus Japan and Korea. There is a profound difference between the attitudes in developed and developing worlds, with the greater acceptance of the technological innovations in developing markets (77 percent versus 44 percent)."

By analogy to public resistance in early 19th century England to the Industrial Revolution, the so-called developed world is showing signs of Luddism (or has been called more recently, Neo-Luddism), this time to innovation. If we assume that IP, and its creation, protection and commercialization, are the hand-maidens of innovation, then the precipitous decline in acceptance to innovation in at least part of the developed world augurs a long-term threat to the acceptance of IP as well. A public that loses its faith in innovation will sooner or later jettison its support for the legal instruments that support such innovation. The United States does not appear at the bottom of Edelman's nation list of innovation skeptics. Against that backdrop, it is worth pondering whether the challenge to patent trolls and the narrowing of patent protection following the Supreme Court's decision in the Alice case, shows that the US is decoupling or coming closer to the innovation-skeptic position.
Edelman is not prepared to thrown in the towel in the face of innovation skepticism in notable parts of the developed world. He urges as follows:

"To invent is not enough. Companies need to demonstrate that innovations are safe based on independent research. There must be a commitment to evolve the product based on consumer experience and feedback. The new product or service must be shown to be good for society, with transparency on the results of the innovation. We will not soon see an uptick in attitudes towards institutions. Therefore, if innovation is the lifeblood of the modern corporation, business must move beyond the WHAT to explain the WHY and the HOW."

Whether this will come to pass is anybody's guess. Given, however, the potentially corrosive effect to IP by continued public mistrust of innovation, the IP community might consider becoming more engaged in these kinds of activities.

Over a recent morning coffee, this moggy stumbled across
what seems to be a further chapter in Nestec’s Nespresso wars. Not the appeal from the Nestec
v Dualit High Court decision (which Merpel is keenly awaiting for the
reasons discussed in two earlier blogposts, here
and here);
no, a new player is at the table. As
reported here at Beverage Daily,
the Ethical Coffee Company (ECC) has initiated proceedings in France, alleging that
Nestlé’s Nespresso machines infringe its European patent.

Not quite the harpoon devicethat Nestec had in mind ...

ECC makes and sells capsules that are compatible with the
Nespresso machine which, following the Nestec v Dualit decision (and pending
any appeal), do not infringe Nestec’s machine patents. However, it is alleged that Nestec introduced
a “harpoon mechanism” into its machines in 2010, which grips the capsule and
retains it in the correct position during and after emptying. This harpoon mechanism (which, ECC contends, is
in the form of a barbed hook within the capsule extraction housing) apparently
stopped ECC’s capsules from working properly in Nespresso machines, and
allegedly infringes ECC’s European patent EP2312978 B1 (“Bet that made them
paws for thought” quips Merpel.)

Naturally, Nestec disagrees with ECC’s assertions and does not
believe the patent to be infringed.
There is an ongoing opposition at the EPO (unfortunately this Moggy’s
French is not up to understanding the lengthy submissions any time soon), and
ECC are thought to be considering further suits in other territories and in
relation to other patents. This promises
to be worth watching, which of course the IPKat will do with fervour, for the
sake of our readers.

Thursday, 29 January 2015

In
yesterday's judgments in Cases T-59/14‘INVESTING
FOR A NEW WORLD’ and T-609/13 ‘SO
WHAT DO I DO WITH MY MONEY’ the General Court of the European Union reviewed
the EU case-law on slogan marks, rejecting the appeal of the US-based
corporation Blackrock Inc., on the basis that its Community trade mark (CTM)
applications were devoid of distinctive character according to Article 7(1)(b)
of Regulation
207/2009.

Possibly
influenced by the US approach relating to trade marks serving both as
source-identifier and for functional purposes, Blackrock applied in 2012 for
‘INVESTING FOR A NEW WORLD’ and ‘SO WHAT DO I DO WITH MY MONEY’ for several
financial services in classes 35 and 36. In both cases the examiner found that
the CTM applications lacked distinctiveness. The First and Fourth Boards of
Appeal respectively dismissed Blackrock's appeals: in their view, both marks
consisted of straightforward expressions whose meanings could be clearly
understood by the relevant public as they were in close connection with
investment/financial services for which protection was sought. Therefore both
signs could not be perceived by the relevant public as origin identifiers but
solely promotional sentences.

All that Vorsprung durchTechnik -- but still Grumpy

In regard to the relevant public, although in
both cases the English-speaking average consumers and professionals were taken
into account, in the ‘INVESTING FOR A NEW WORLD’ decision the Board of Appeal
stated that the level of attention was ‘relatively high’ given the nature of
financial services, while in the ‘SO WHAT DO I DO WITH MY MONEY’ the Board took
the view that with reference to promotional formulas the level of attention was
‘relatively low’.

In its
appeals to the General Court, Blackrock supported an identical single plea in
law that there had been a wrong assessment of its marks’ distinctiveness and a
misapplication of the judgment in the Court of Justice of the European Union
(CJEU) ruling in VORSPRUNG DURCH TECHNIK (Audi v OHIM, Case
C-398/08 P, ECR, EU:C:2010:29), on which it had extensively relied in
the OHIM proceedings.

The Court
sketched out some preliminary remarks common to both judgments. It recited the
settled case-law affirming that a mark has distinctive character if it serves
as a source of commercial origin and that distinctiveness must be assessed by
reference to the relevant goods and services and to the perception of the
relevant public. The Court specified that those two criteria also apply to
signs which are slogans for which trade mark protection is sought: such
protection is not barred solely because of the advertising use of the signs. In
truth, though, for slogan marks the public’s perception is not the same as for
other types of marks and, therefore, assessing their distinctiveness results
more difficult.

In the
light of Audi v OHIM the General Court addressed some typical
issues affecting slogan marks. Thus a slogan does not necessarily imply
‘imaginativeness’ or ‘conceptual tension’ directed at providing a striking
impression in order to be distinctive; if a mark is perceived as a promotional
formula or because of its laudatory meaning it can be used by more than one
undertaking it will not sufficiently follow that such mark lack
distinctiveness; a slogan mark can simultaneously be inherently distinctive and
functionally descriptive for advertising purposes.

Let's now
take a look at the specifics of each of Blackrock's appeals:

Case
T-609/13 ‘SO WHAT DO I DO WITH MY MONEY’

Provided
that the low level of attention of the relevant public had been already
established by the Board of Appeal, the Court considered that SO WHAT DO I DO
WITH MY MONEY could be easily understood, in that it comprised English words
related to the financial services covered by the CTM application and arranged
according the English grammar rules. The slogan’s clear message would induce
the relevant public to reflect on whether it was using its money effectively.
Moreover, the expression contained in the sign was laudatory and promotional of
Blackrock’s services, as it could lead to the conclusion that the applicant
could capably answer that question. The slogan had no semantic depth which
could offset the clear close link between the sign and the relevant
financial services. Contrary to what Blackrock stated, the Court did not
find any multiple meanings of the slogan, nor did Blackrock provide any. In any
event, even if the slogan had several meanings it that didn't mean that it was
distinctive. Finally, said the Court, neither its interrogative form nor the
open-ended nature of the implied question could help give it any
distinctiveness.

Did the
Board of Appeal misapply the CJEU's ruling in Audi v OHIM? No, said
the Court: Blackrock misunderstood its test for distinctiveness: since the
German slogan VORSPRUNG DURCH TECHNIK could have
different meanings beyond the literal meaning of "advance or
advantage through technology", or could constitute a play on words
or could be perceived as imaginative, it was both easy to remember
and distinctive. That was not the case for 'SO WHAT DO I DO WITH MY MONEY’.The
Court specified that the Board of Appeal did not reject the CTM application
solely because of its laudatory nature but also because it could not serve as
origin identifier. Nothing was wrong with the Board of Appeal's test of
distinctiveness: when the relevant public would think of a service provider
named 'SO WHAT DO I DO WITH MY MONEY’, while looking at the mark, it wouldn't
think it was being informed about the commercial source of the services for
which CTM registration was sought.

Case
T-59/14 ‘INVESTING FOR A NEW WORLD’

The Court
did not accept the Board of Appeal’s conclusion that the relevant public’s
level of attention was ‘relatively high’. While that public included
professionals and registration was sought for financial services, the relevant
public's attention was low when slogans are concerned.

Examining
the Board of Appeal’s assessment of the mark’s meaning, the Court pointed out
that ‘INVESTING FOR A NEW WORLD’ is a combination of common English words which
respect the rules of English grammar. It followed that the CTM application
conveyed a clear the meaning that “the services offered are intended for a
new world’s needs”, and, therefore it expressed a positive and
laudatory message with reference to the relevant services. Moreover,
a close link between the sign and the financial services covered by the CTM
application was apparent, depriving the mark of any semantic depth, word-play
or surprising or unexpected elements which could confer due distinctiveness.
Finally, in relation to the applicant’s argument that the CTM application had
multiple meanings, the Court specified that this circumstance is not decisive
to affirm its distinctiveness and that the several possible interpretations of
the mark did not change its laudatory nature. Indeed, if at least one of the
trade mark application’s possible meanings expresses the goods’ and services’
characteristics, its registration must be rejected.

Moving on
to the judgment in VORSPRUNG DURCH TECHNIK, the Court held that the Board of
Appeal had correctly rejected the CTM application because it could not be
deployed as origin identifier beyond being a promotional formula. The Board of
Appeal was also right in simply clarifying that, in Audi v OHIM the
distinctiveness of Audi’s slogan mark had been affirmed, given that the sign
was a widely known slogan, having been used for many years, and could also lead
consumers to identify the commercial origin of the advertised motor vehicles.
In contrast, such long-standing presence in the market for the Blackrock
slogan's reputation was not proved in the present case.

So what do readers think about the distinctiveness-functional
descriptiveness dichotomy for advertising purposes?

This Kat was delighted to receive from KatfriendRutger M. Kleemans(Freshfields Bruckhaus Deringer LLP, Amsterdam) the following news:

Rutger Kleemans

On 27 January the Hague Court of Appeal (judges Kalden, Brinkman and Van Nispen) ruled in summary proceedings in a case between Novartis AG and Sun Pharmaceutical Industries BV. The case is about indirect infringement by a so-called skinny label. Novartis’s patent EP 689 is of the Swiss type and discloses the use of zoledronic acid for the treatment of osteoporosis, administered intravenously in a unit dosage form of 2-10 mg where the period of administration is about once a year. Sun was marketing zoledronic acid in an identical dosage form but approved only for use in Paget’s disease, which indication is not covered by EP 689. The Court of Appeal granted Novartis an injunction (4.38)

“given the justified interest of Novartis to act against indirect infringement of its patent rights” which amongst others”

forbids Sun to commit indirect infringement” on pain of an immediately eligible penalty sum. The same patent was previously held invalid by the UK Courts for lack of novelty as a result an invalid priority right in Novartis v Hospira (see [2013 EWCA 516 (Pat.) and [2013] EWCA Civ 1663). Concerning the UK decisions, the Hague Court of Appeal states (4.3):

“Departing from the said criterion the Court of Appeal, other than the judge in summary proceedings and the English High Court and Court of Appeal, partly because of different insights (more in particular after reading of the priority document) and partly because of other arguments of parties…”.

Now this is jolly interesting, thinks this moggy. First, as mentioned above, the Dutch Court has disagreed with the Courts of England and Wales on the matter of priority entitlement and hence validity (for which see Katpost herefor the first instance and hereand herefor the appeal judgment). But also, the judgment appears in stark contrast to the case last weekwhere Arnold J permitted Actavis to launch a product (pregabalin) with a skinny label without requiring further measures such as overpackaging that were demanded by Pfizer; whereas here the Dutch court finds Sun Pharmaceutical guilty of indirect infringement despite the skinny label referring only to Paget's disease and not osteoporosis.

In fairness, the prescribing and dispensing systems are different between the England/Wales and the Netherlands, and there are other factual differences between the cases. For example in the Dutch case Sun had won a tender to be the exclusive supplier of zoledronic acid 5mg/100ml for the healthcare insurer VGZ. The different outcome is not therefore necessarily to be seen as indicative of a divergent judicial approach to the efficacy of skinny labels to avoid patent infringement.

You can read the Hague Court of Appeal decision here (in English) and here (in Dutch).

From Stijn Debaene and Hakim Haouideg (fieldfisher, Brussels: katpat!) comes some pretty hot news from Belgium which ties in to some extent with yesterday's guest Katpost by Barbara Cookson on the recovery of costs in patent litigation -- but it goes wider than that and, like Belgian chocolates, is likely to make an impact that reaches from one end of Europe to the other, and beyond. Stijn and Hakim write:

In a decision of 26 January 2015, the Antwerp Court of Appeal decided to refer some preliminary questions to the Court of Justice of the European Union (CJEU) in a patent infringement action brought by United Video Properties (UVP) against Telenet.

In April 2012 [and thankfully not 2002, as an earlier version of this blogpost erroneously stated] the President of the Antwerp Commercial Court revoked the Belgian part of United Video Properties' patent for lack of novelty. UVP appealed to the Antwerp Court of Appeal but, after a negative decision in the United Kingdom on the UK part of the same patent (in proceedings against Virgin Media), UVP withdrew its appeal. This meant that the only issue that remained to be decided was the costs.

Telenet argued that, if Belgian law as it stands today were to be applied,

* it would only recover a small part of its attorney fees. The Belgian Act of 21 April 2007 and a Royal Decree of 26 October 2007 indeed provide that only small capped amounts can be recovered from the losing party as compensation for the attorney fees of the successful party.

* it would not recover the fees it paid to its patent attorney as Belgian case law only provides for the possibility to recover this type of costs where the unsuccessful party acted wrongfully and the fees were incurred in consequence of that wrongdoing.

Accordingly, argued Telenet, Belgian law violates Article 14 of IP Enforcement Directive 2004/48["Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this"] and asked the Antwerp Court of Appeal to refer preliminary questions to the CJEU.
On 26 January 2015 the Antwerp Court of Appeal in essence asked the CJEU whether Article 14 may be interpreted as authorising

* a system of small capped amounts as provided for by the Belgian Act of 21 April 2007 and a Royal Decree of 26 October 2007,

* case law that holds that the successful party can recover the fees it paid to a technical expert only when the losing party acted wrongfully.

We believe this case potentially has a huge European impact, as Belgium is not the only Member State to have a system under which only a small part of the real attorney fees can be recovered from the losing party in a IP dispute.

Says the IPKat, it's plain from the wording of the questions that the referring court, omitting the word "patent", contemplates a ruling that encompasses all forms of IP litigation and not merely patent suits. The CJEU, however, has a track record of not giving answers that run wider than the facts of the underlying national litigation. While it is important to take account of considerations of procedural economy and of not extending a ruling beyond points on which the parties are prepared to argue, it seems immediately apparent to this Kat that there is a more important reason for answering the Antwerp court's broad questions quite narrowly. The words "reasonable and proportional legal costs" are likely to measured by quite different yardsticks in patent litigation than in cases involving trade marks, copyright or designs and the relatively short life of the patent and the impact of technological obsolescence may justify additional expenditure. While it is always annoying to have to keep returning to the CJEU to get it to amplify or fine-tune earlier rulings, that may still be more desirable than giving a broad ruling that causes subsequent injustice or inconvenience to national trial courts.

Every successful IPlitigant's costs dream ...

Merpel adds, the words "reasonable and proportional legal costs" in Article 14 will be an invitation to counsel to plead before the CJEU that these concepts should also be measured against the ability to recover costs in actions that are not covered by implementation of the IP Enforcement Directive. For example, Recital 13 leaves it to Member States to choose whether to extend its provisions so as to cover actions for unfair competition, parasitic copying and the like. Will the mandatory recovery of "reasonable and proportional legal costs" in litigation involving the traditional IP rights be treated differently depending on whether that principle does, or does not, extend to other rights, she wonders -- and will a different cost-capping regime determine that, in some countries, breaches of IP licences will be treated as IP infringements rather than breaches of contract?

Wednesday, 28 January 2015

The typical successful patent practitionerof the mid-2030s: technically savvy multi-tasking female, working from home ...

Visiting a group of patent and trade mark attorneys (but mainly patent folk) the other day for a friendly chat over a sandwich and sushi, I was asked what I thought the profile of a typical successful patent practitioner might be in 20 years time. My colleagues were a bit surprised and perhaps a bit amused when I opened with the words "She will be ..." since, while change is in the air, the patent profession is still under-represented by women, particularly when compared with the other major branches of intellectual property practice[on this topic, new readers to this weblog may wish to read the recent posts here and here, together with a selection of the best and worst of our readers' comments]. I added that the typical successful patent practitioner of the mid-2030s would almost certainly have a wider range of peripheral skills and knowledge and thus be able the better to engage with clients in taking a holistic approach to what the client may perceive as a purely legal issue. Thus, in answer to the question "can you patent my invention?", the client will not just receive a yes/no response but will be prompted to consider a variety of different commercial and strategic options. This Kat believes that this is already happening to a not inconsiderable extent in many practices and among more experienced practitioners, but he feels that professional training and better use of information and resources already available online will enable the successful patent practitioner to advise across a larger spectrum of issues with greater confidence and at a higher level of competence than at present.

The unified patent court: newly hatched, but misconceived?

When it comes to litigation however, it is less easy to profile the successful patent practitioner, at least in the new Europe. Regular patent attorneys, patent attorney litigators and solicitors are all equally disadvantaged by the ongoing uncertainty as to how the unitary patent and the unified patent court will change their lives and those of those of their clients, and as to the extent to which they will need to prioritise their cultivation of patent claim interpretation, drafting pleadings, manipulating procedural rules and advocacy. The new system should be a newly-hatched chick, freshly emerging from its shell and ready to face the world as it assumes its pre-ordained form. Instead it more closely resembles a stream of escaped yolk, oozing from the shell in a direction of its own making: all agree that it may have some value, but will it in practical terms be of any use?

Group therapy plus refreshments and net-working: the ideal mix for a patent conference

So how do we get from where we are now to where we want to be in, say, 2035? There are three basic approaches: one, through the media, is based on the transmission of relevant legal fact and principle, so that it can be absorbed, understood, and applied where necessary. A second, through training courses, mock trials and workshops, gives people the opportunity to practise skills that require and transcend knowledge: writing specifications, drafting claims, pleadings and contracts, advocacy techniques and the like. The third, of which this Kat is particularly fond, is the sharing of individual and collective uncertainty, ignorance and unfamiliarity with the best way to tackle uncharted issues: this for him is the best justification of the patent conference, where speeches and sessions are not mere exercises in the transmission of fact but a catalyst. There, you have the chance to discover that you are not alone: your doubts and anxieties are those of the people attending with you, and both the sessions and the discussions surrounding them can provide insight where one there was a professional fog, clarity in place of confusion. Although the word "networking" is overused by many conference organisers and disparaged by cynics as a euphemism for "having a good time, ideally at someone else's expense", a good conference gives those who attend the chance to speak with one another, to listen, to engage in professional dialogue and to come away with a sense of collegiality, a feeling that something has been gained by the sharing experience. Judging by the fact that there have been a fairly large major international patent events over the past couple of years, most of which have been well attended, this Kat suspects that both those who organise these events and those who attend them feel much the same way as he does.

On a personal level, this Kat notes with some pleasure that Managing Intellectual Property magazine's International Patent Forum 2015 will soon be with us, running on 10 and 11 March. This year's must be the third, since he was pleased to announce the second last year. This Kat -- who has a soft spot for the magazine since he founded it in 1990 and was its first editor -- is pleased to see that admission is free for in-house corporate and patent counsel, academics and R&D professionals and that it is once again offering a £300 discount to readers of this weblog who register for it [to claim this discount, private practitioners should email registrations@managingip.com, quoting "IPKAT"]. The venue is once again London's Waldorf Hilton Hotel, which is not 100 miles from his base in Holborn, so he may well be popping in to enjoy the ambience, say hello to his friends and pick up a little inspiration.

The line-up of speakers has some familiar countenances plus a sprinkling of new faces. Corporate speakers include Clemens Heusch (Head of European Litigation. Nokia), Julie Dunnett (Director of IP, GKN Aerospace), Kevin Fournier (IBM), Leonid Kravets (Interdigital Communications), Ian Hiscock (Head of IP Policy and Litigation, Novartis) and Adam Pilcher (Metaswitch Networks), and this Kat will be curious to know how confident are the patent decision-making processes in the enterprises which they represent. To give just one example, he has heard several different versions of what US software patenting is all about in the wake of Alice v CLS Bank[noted on this blog by Darren here], but what is the reality on the ground so far as patents examined and granted before and after Alice are concerned, and for examiners, businesses and investors? Likewise he has received mixed messages concerning China's patent grant and protection policies. These are great topics to talk through and to see how much consensus can be reached when patent owners and practitioners can get put their heads together.

All litigation takes a toll of litigants, whether in terms of money expended, time consumed, emotions drained or blood pressure sent racing. The following guest piece, by long-standing Katfriend, IP practitioner, blogger and Old Nick devotee Barbara Cookson, reflects on an example of a case that yielded the injured party a good deal less and cost considerably more than he originally expected. Yet with an adjustment of his own expectations and a little tweaking of the procedural issues, things could have been so different ...

Snatching defeat from the jaws of victory

When litigating in the Intellectual Property Enterprise Court (IPEC), England and Wales, there are often times when the costs are in danger of becoming significantly greater than the damages in issue. While the costs cap allows those with smaller value claims to have access to justice, costs can become equally contentious.

One of the claimant's frames --or a machine for extracting costs?

On 22 January 2015 Judge Hacon gave a written costs judgment in Haiss v Ball[2015] EWHC 74 (IPEC). The costs judgment is suitable for children whereas the principal liability case at [2013] EWPCC 35 may need to be treated with caution as it concerns frames for use during sexual activities involving bondage. At trial in July 2013, Mr Ball was found by Miss Recorder Amanda Michaels to have made infringing products. Damages could not be agreed and were eventually assessed on inquiry on the now almost inevitable user principle [on which see Barbara's earlier guest Katpost here] at 10% in December 2014 at [2014] EWHC 4019 (IPEC). This resulted in the sum due being a paltry £2,859.20 plus interest. Once that judgment was handed down, there remained the usual argument on costs. The idea in the IPEC is that costs should be determined quickly from pre-prepared schedules and that the costs decision be delivered immediately so that it can be recorded in the order prepared by the advocates. This means that both counsel and solicitors -- if present (which they may well not be) -- try to listen while simultaneously scribbling down the judge’s words. The term for this is "taking a note". You cannot use a tape recorder or other instrument for recording sound. It is contempt of court if done without leave of the court. You can of course pay for the official court recording to be transcribed, assuming that there were no faults in the recording process [This Kat can see no good reason for banning the use of recording instruments in the digital age, in which the art of short-hand writing is all but obsolete and grown-up adults can be trusted not to abuse the facility].

The problem comes when there have been offers and it is not a simple matter of assessing this costs incurred by the winning party.

Short-hand? No way!

In this case, since Haiss and Ball already had their two IPEC hearing dates, there was no time left to determine costs when judgment was handed down so it had to be done on the basis of written submissions. The good side of this is that we get the benefit of the written analysis. However, Judge Hacon doesn’t like it and makes the point that “the parties should ensure that sufficient time is set aside by the court for the hearing following judgment”. This, naturally, is all done in private so anyone interested in the costs may find themselves staring at an empty court room -- as happened to me when I attended the handing down in the Marrubi inquiry as to damages (here). At a later date, on 16 January, a good two hours were spent by the parties in sorting out the question of costs following a Calderbank offer[an offer of payment in settlement of a claim which is made without prejudice, save as to costs] that turned out not to have been beaten. Judge Hacon also gave an extempore judgment on that occasion which, had his predecessor (Mr Justice Birss) known at the pre-trial case management conference what he knew at trial, he would have transferred the case to the small claims track. This had the result that there was no costs order at all for the whole of the inquiry. But I digress ...

In Haiss v Ball, the offers to settle were Civil Procedure Rules (CPR), Part 36 offers. Judge Hacon begins his judgment by making a general observation encouraging IPEC litigants to take a realistic view as to the likely outcome. In his court, by the time of the case management conference, or completion of pleadings, the parties should be sufficiently informed to make a well-judged offer under CPR Part 36. Part 36 is not the simplest part of the CPR for an inexperienced litigators to navigate (but inexperience gives you no concessions) and it is also scheduled to be updated from 6 April 2015 (there's a useful post on that from McDaniel & Co, here). Nevertheless, Mr Ball -- then acting as a litigant in person -- had made a £15,000 Part 36 offer in August 2013. As is normal for a Part 36 offer, it did not include costs. The relevant period for Haiss to accept it expired without acceptance. The offer remained open under the current rule (from 6 April an offer can be made such that it is automatically revoked at the end of the acceptance period).

Mr Ball did eventually revoke this offer on 30 December 2013. In retrospect this turned out to be a mistake because Mr Haiss did not beat it (though it would not have been a mistake had Mr Haiss seen the light and taken the £15,000 later in the day). His counsel (subsequently appointed presumably under direct access) pleaded that his status as a litigant in person meant that he should be given more indulgence than would be accorded to a company awash with high-powered legal advice. The judge preferred to accept the submission that “litigants in person, like all litigants, must live with the consequence of ill-advised procedural decisions”. The first offer was not totally pointless though, as a result of CPR 44.2(4)(c), which allowed the judge to decide in his discretion that Mr Haiss was unable to claim his costs after the expiry in September 2013 of the relevant period for the offer which he clearly should have accepted. Mr Ball, however, only received his costs from the expiry of the relevant period in March 2014 on a second Part 36 offer on the same terms.

At this point I feel we should stop for a round of applause for the subtlety of a Haconian judgment['Haconian' being defined as "sensible because it avoids going into those places that will only get you into trouble if you go there"]. The reasoning is scrupulous. The litigant in person is not allowed any indulgence. Mr Haiss is spared any criticism for the sequence of offers which are spelled out purely factually in the judgment but which suggest to the reader, who knows that the final judgement was for £2,859.20 plus interest, that Mr Haiss conducted his case with some degree of disproportionate oppression. For example it is stated that Mr Haiss’ solicitors wrote to Mr Ball suggesting that he may wish to mortgage or sell property in order to raise the sums Mr Haiss was seeking.

Another useful pointer for the litigator in this judgment is the treatment of Mr Ball’s refusal to mediate. Mr Ball said that, due to the high cost of mediation and the low value (sic) of any settlement, mediation would not be cost-effective. The judge agreed with Mr Ball that, bearing in mind Mr Haiss’ stance with regard to the sum he felt was due by way of damages, he doubted that mediation would have been successful. The refusal to mediate therefore had no effect on the costs assessment.

For the litigator making an offer it may not always be possible, desirable or proportionate to give a detailed analysis of the computation used in this dispute. Judge Hacon confirms that there was no obligation on a party making a Part 36 offer to spell out his reasons -- he is entitled to pluck a figure from the air.

An IPEC litigant workson reducing his blood pressure

While this began as a case where the costs of the inquiry greatly outweighed the damages, it transpired that the payment ordered still resulted in a sum (£9,710) that significantly exceeded the damages and it was paid by the winner to the loser. It should however be noted that the costs of the liability trial had been paid by Mr Ball since, at that time, he had not learnt about the subtleties of Part 36 or the desirability of representation in court. Therefore, overall proportionate justice probably has been done in purely financial terms. The impact of this case, which began in 2011, on the blood pressure of the participants is unknown to the writer but, we suspect it was not beneficial to either party.

Thanks, Barbara, says the IPKat, it's good to see how the admirable intention of the law to deal with litigation costs in a clear and simple manner can work out in practice, when the facts or the litigants are unfavourable. Merpel, who is a bit cross-eyed from reading backwards and forwards through the CPR costs rules, wonders if there isn't an easier way of doing things. Do any of our continental cousins in Europe and our friends from more distant parts have better ways of doing things, she asks.

The Twitter Ten Thousand. Earlier today the IPKat's Twitter account @ipkat attracted its 10,000th follower. Although 10,000 is an arbitrary number and carries no greater significance on the IP social media than, say, 9,999 or 10,001, this little milestone is something that makes all the Kat team purr with happiness -- and indeed with gratitude. since without our readers, contributors, critics and followers we would be nowhere. The IPKat, Merpel and blog team are committed to providing a lean and mean Twitter service, letting followers know when new blogposts appear, making pertinent IP comments sparingly and being highly selective in the third party tweets we retweet. Whether you are a regular on Twitter who does not yet follow us, or are preparing to sign up to that service for the first time, you are welcome to give us a try, here.

Around the weblogs. From Canadian copyright expert Barry Sookman's blog comes two items of interest: the first is his 2014 year in review post for the Law Society of Upper Canada; the second is a set of slides that summarise nearly 60 cases that feature in his review. There are two fresh posts on the jiplp weblog that list intellectual property books which are available for review. Remember: review the book and you get to keep it. The books on offer are listed here and here. Class 99 carries a handy post by Krystian Maciaszek on a recent OHIM Board of Appeal ruling on registered Community designs and how to establish on the evidence that such a design would infringe an earlier copyright work. Over on the 1709 Blog, Ben Challis waxes lyrical on the theme of "where there's a hit, there's a writ".

News from elsewhere. First to send the IPKat this link to "Royce Rizzy Hit With Trademark Infringement Lawsuit from Rolls-Royce" was the ever-vigilant Chris Torrero (katpat!), but we thank other readers for doing likewise. This Kat has also received a plethora of links to the BBC piece "Sam Smith: Tom Petty given writing credit for Stay With Me" -- a curious tale if ever there was one. According to the Beeb, "Tom Petty has been given a song writing credit on Sam Smith's hit Stay With Me, because of the similarities to his 1989 track I Won't Back Down". This is the result of an amicably-agreed out-of-court settlement and it's not known whether any money is changing hands [apart, presumably, from Smith and Petty to their respective legal teams, thinks Merpel].

Call for papers. The University of Southampton's Law School is holding a conference, "Enrolling internet intermediaries in the law enforcement process - Challenges and opportunities" on 17 and 18 September. You can check it out here. This iCLIC event, the first of its kind, seeks to being together researchers, legal practitioners, industry actors, digital rights advocates and NGOs to debate key issues for the development of the internet. If you'd like to respond to the call for papers, you'll find the relevant details here. But note the deadlines, the first of which is 26 March for the submission of abstracts.

Patent attorneys seem to begetting younger these days

IPSoc again. The IPKat’s ears pricked up when he heard about the forthcoming events that IPSoc has in store this year. For those not in the know, IPSoc is the society for junior lawyers that brings together solicitors, barristers, patent & trade mark attorneys and legal executives for a spot of learning and socialising in a congenial, relaxed environment. IPSoc, which has an impressive pedigree and is now in its fifth year, draws impressive speakers to their creative “educationals” which mop up those pesky CPD points and as well as fun social events throughout the year. This Kat wonders whether, with annual membership dues at only £40 [that's roughly what it costs to watch Cats at the London Palladium], any self-respecting Kat-in-the-making can afford not to be a part of this exciting venture.

Kicking off the events this year is a social, giving the opportunity to mix with fellow members on 12 February -- to which it is not too late to sign up. Hot on its tail is a great educational which is a must for every fashionable Kat: an update on "Victoria’s Secret, Rihanna and the Future of the Law of Trade Marks and Passing Off" by Charlotte May QC on 4 March. This event is only open to fully paid-up members so, if you aren’t a member, now is the time to join. For more information on IPSoc and on how to become a member please visit its website or email membership@ipsoc.org.

EPO Blues? No, not at all. Yesterday's Katpost by Merpel,"Life as a patent examiner according to the EPO: paid-for article in the New Scientist", recorded, without criticism or comment, the fact that the European Patent Office had paid a highly respected journal to carry an interview with an EPO examiner. This blogpost encouraged many of our contributors to fire off their salvos against or in defence of the beleaguered body -- but also inspired the following parody of that great ABBA hit and earworm par excellenceMoney Money Money.

I sleep all night, I work all day, to pay the bills I have to pay

Ain't too bad

And when they’re paid there’s still a sizeable amount that’s left for me

Debate around
online copyright enforcement has intensified over the past few years,
particularly with regard to blocking injunctions, and will likely be even more
so this year.

The recent decision
of the Court of Justice of the European Union (CJEU) in Telekabel[here and here] heldthat such measures are compatible
with EU law, and that it is left to the concerned internet service providers
(ISPs) to determine how best to achieve the result sought by the relevant
rightholder(s).

In the UK several
website blocking orders have been issued since the introduction of s97 CDPA,
and via the Cartierdecision [here and here] it is now clear that such
measures are also available against websites
that advertise and sell counterfeit goods.

But how does website blocking work in other EU Member States, eg Greece?

"With a 49 page
decision (13478/2014) on 22 December 2014 that leaked on the internet before
its official release, the District Court of Athens dismissed the application of five Greek collective management organisations for an injunction that would
oblige Greek ISPs to block pirate sites.

The dismissal was justified
on fundamental freedoms grounds and conflict with the principle of
proportionality.

Background

Grammo, Athina, OSDEL, AEPI
and EPOE are Greek collecting societies managing copyrights and related rights.
Relying on Art. 64A of the Greek Copyright Act, by which
Greece implemented Art. 8(3) of the InfoSoc
Directive into its
own national law, they requested that the defendant ISPs should enforce
technical measures to block websites infringing the rights of their members.
These included notorious torrent sites like thepiratebay.se, kat.ph and
isohunt.com and local online forum sites that provide their members with
hyperlinks leading to sites where infringing content can be downloaded (like
Rapidshare, Mediafire etc). One of the collective societies (Grammo,
representing phonogram producers) went further and requested that the ISPs
should be forced to deliver all archives containing Internet traffic data
relating to those sites. This information would then be used in trial following
a lawsuit against the owners of the infringing websites.

Copyright infringement does not trump data protection in Greece

The Court’s
decision

In relation to the request
for exposure of traffic data, the court held that the right of the collective
societies to request an order for communication of documents, according to the
Greek laws implementing Art. 6 of the Enforcement
Directive and Art.
15(2) of the Ecommerce
Directive can be only exercised in compliance with the
legislation regarding data protection and confidentiality of
communications.

According to that legislation ISPs are obliged to
reveal the identities of the persons behind the IP addresses and give
information about Internet traffic only in regard to certain specific major
offences listed in an exclusive manner in Art. 4 of Law 2225/1994. Copyright infringement is not within
that list.

As long as the list is not
amended, copyright and related rights holders are practically deprived of that
legal instrument. In view of that, the significance of blocking orders is even
greater for rights holders. It is worth mentioning that the Greek culture
minister proposed the inclusion of copyright infringement in the aforesaid list
through an amendment proposal brought to the Greek Parliament on 22 December 2014.
The proposal was however withdrawn following harsh criticism from the opposition
and some MPs of the coalition government parties.

Concerning the request to
block access to specific websites the court’s reasoning is –in its main points-
as follows:

- Linking does not
constitute copyright infringement neither as an act of reproduction nor as an
act of making available to the public. The Court made no reference
to Svensson[Katposts here]but only to
pre-Svensson outdated theory. Did the judge disagree with the CJEU
regarding the nature of the act of linking or was she simply not familiar with
the decision [that would be in contrast with Dutch Advocate
Generals, who are instead very much
familiar with Svensson and
its progeny]? Here’s a lost opportunity to have Greek case law on whether linking to
unlawful content is communication to a “new” public or not.

Washington scandals? A walk in the park compared to ignoring Svensson

- The content
distributed through p2p technology is not necessarily infringing. It could
include free information or works. This would be either because these lack
originality or because they have fallen into the public domain or because their
communication to the public is permitted by the authors, eg under a creative
commons license. The same can be said in relation to sites giving access to
torrent files or links. The fact that an IP/DNS blocking measure cannot
discriminate between infringing and legal content can deprive Internet users of
access to online information, thus violating their freedom to information and
freedom to participate in the Information Society (see Art. 5A of the Greek Constitution). This is
the CJEU reasoning in Scarlet[and also in Telekabel].
In that case the CJEU ruled on the legality of content filtering, ie the installation
of a system that would monitor all the electronic communications made with the
use of p2p software through the network of the ISP. The Greek court extended the
decision’s reasoning to IP/DNS filtering. The websites could also contain
lawful data. Users’ access rights prevail over IP rights. The court equated the
legal implications of two different technological measures (content filtering –
IP/DNS filtering). Is this justified? In order for one to decide, one would
have to know at least the lawful content/infringing content ratio of the
websites.

- The measure
of blocking is not suitable to achieve protection of the rights holders,
because the said websites can be easily transferred to a new IP and DNS. This
fact, in combination with the disproportionate limitation of users’ and ISPs’
rights, leads to a conflict between the measure sought and the principle of
proportionality.

Be specific, please!

- Such a measure
can only be acceptable if it leads to the blocking of a specific part of a
website but not of the website as a whole. So this means that in
contrast to “www.example.gr” the blocking of “www.example.gr/piratedmovie” is
OK.With that assessment the Court overcame the obstacle of freedom
of information and gave rights holders the ability to request the blocking of
specific parts of websites that distribute infringing content. The rest of the
website that offers legitimate content remains accessible. No freedom of
information or freedom to participate in the Information Society violation. Do
we have the privilege of creating the term “deep-blocking”?

Apart from the above
mentioned the court “borrowed” from Scarlet also in regard to
the antithesis of blocking measures to Art. 15(1) of the Ecommerce directive
and to the ISPs’ freedom to conduct business. The nature of the requested
measure makes it difficult to follow such an opinion. Website blocking is an
inexpensive “one off” measure while content filtering is an on-going costly
procedure that covers all future data transmission through a specific technology
(p2p).

To sum up: the Athens Court
rejected blocking measures in all cases with the sole exception of blocking
specific parts of a website. The decision is in contrast with the earlier – and the
first one ever in Greece - 4658/2012 decision of
the same Court, which found that the requested blocking of two websites is
proportionate and in compliance with constitutional rights."

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